Reuters Blogs

Commodity Corner

Views on commodities and energy

March 23rd, 2009

Farm fight gives Argentine newspapers plenty to chew on

Posted by: Helen Popper

cristina

Argentine farmers’ decision to resume their anti-government protests dominated Sunday’s newspaper editorials, with some commentators saying the seemingly never-ending conflict over soy taxes risked spilling into political turmoil and even violence (Joaquin Morales Sola in right-leaning La Nacion).

Most agreed the conflict’s resurgence was down to last week’s surprise announcement by President Cristina Fernandez to share the soy tax revenue with the provinces, which critics see as an election ploy ahead of a mid-term vote due in June. Farmers took as proof she is unwilling to lower the levy.

Some columnists criticized the government for erratic policies that have stoked the conflict at a delicate time for the country (Eduardo van der Kooy, in top-selling daily Clarin), saying Fernandez needed to change tack to reflect the changed economic reality (Miguel Bonasso in Critica).

Argentine media are increasingly critical of the government and few defended the president’s handling of the standoff. Leftist daily Pagina 12, which generally supports Fernandez, echoed her own defense of the soy taxes as a vital tool to encourage more diversity in crops and redistribute wealth among the poor.

Here are some key extracts from the leading newspapers’ best-known columnists: 

Joaquin Morales Sola, right-leaning, pro-countryside La Nacion:

“Sometimes, violence is built slowly with words and gestures. Argentina is on its way there. The countryside has exploded, as was predictable, after the government’s latest assault on the farmers, who rightly realized the government hated them. Hate is always a precursor to violence, as are measures taken without consultation … There is a palpable and disturbing climate of hate emanating from those who govern and from the farm sector as well.

“If the government was willing to give up 30 percent of the soy export taxes, no one has explained why it wasn’t willing to give that money to the farmers. A reduction of that size in the export taxes would have instantly calmed down the farmers.

“Provincial leaders in the soy regions didn’t have time to celebrate the government announcement (to share soy tax revenue with the provinces) before they got wind of the rebellion on their doorsteps … violence isn’t far off.” 

Miguel Bonasso, a lawmaker who used to back the Kirchners but has since distanced himself from them, in Critica, an independent, center-left oriented daily:

“The last thing the government or society needs is to go back to the events of last March that caused the gaucho war.

“The state should impose taxes on exports, like it does on imports. The public sector should get a share of farming profits, as it should from mining or oil … but the burden should be fair and reasonable, according to different circumstances. The situation of small- and medium-sized farmers is not the same as the big sowing pools (alliances of investors who farm soybeans).

“Neither are the circumstances the same as they were last March. In the intervening period we have seen one of the worst droughts in history and a collapse in international commodities prices, including soy.”

Alfredo Zaiat, in leftist, pro-government Pagina 12:

“The privileged farming lobby of the Pampas, represented by four, landed groups that have lost their historical differences to redefine themselves as the Argentine Rural Soy Federation, wants to do away with export taxes, especially those on soy.

“The loss of fiscal income that would come from such a measure could not be immediately compensated elsewhere, so the resulting loss in revenue would have to come from debt.

“What the local branch of the multinational soy corporation want, with the blessing of the opposition, is to eliminate the soy export taxes and get a steep devaluation (of the peso). In this national championship, where no questions are asked, the leaders of the landholders and soy farmers never explain what this double whammy of devaluation and zero export taxes would mean for prices and people’s purchasing power.”

Eduardo van der Kooy, in top-selling daily Clarin, which has taken an anti-government line of late:

“Contradictions and confusion appear to be the only signals from the government in these grave times. Such behavior is leading the country to unbearable levels of social tension.

“They even mounted a fragile negotiating table with the farmers. But this week the dialogue went out the window (and) Cristina came out with a botched formula to share the soy export taxes with the provinces.

“With no room left for maneuver, the farm leaders had to launch (a new strike) … Cristina told the farm leaders the soy export taxes couldn’t be touched for fiscal reasons. She also said she wanted to avoid a “soy takeover” in the countryside. Two weeks later she announced she would give 30 percent of the soy tax revenue to the provinces, so the fiscal reasons weren’t so solid and the “soy takeover” even less so. From now on, will the provincial governors and mayors getting the profits from soy do anything to encourage farmers to grow corn and wheat?”

March 19th, 2009

The Perpetual war of the Pampas

Posted by: Helen Popper

tractor-protestIt all looks very familiar. Argentina’s rebellious farmers are threatening to go back to their highway protests, the government is refusing to cut export taxes on soybeans and another showdown in Congress is on the horizon.

If ruling party lawmakers’ continue to refuse to take their seats and allow a vote on an opposition-led bill to cut the taxes, farmers will have a good excuse to resume road protests and a freeze on grains sales to starve the state of revenue.

President Cristina Fernandez will be loath to see another showdown on soy taxes after last year’s crushing defeat when her own vice president cast the deciding vote against her in the Senate, forcing the government to roll back the sliding-scale system that set off months of political turmoil.

Rather than risk another spectacular defeat, especially as she tries to move up mid-term elections to June, Fernandez could try to take the steam out of the opposition drive by lowering the taxes herself — and local media speculated this week that she was mulling such a move.

But government officials have ruled out that possibility.

Even if Fernandez were to offer a concession on the soy tax, it would likely be a small one because she would not want to lose too much face or too much income in an election year.

But a small reduction is unlikely to satisfy the farmers, making any resolution seem more distant than ever.

A year of bitter fighting, mutual insults and political tension has blunted the tool of negotiations and the conflict looks poised to drag on for at least as long as Fernandez and her supporters remain in power.

November 21st, 2008

The Devil is in the details

Posted by: Helen Popper

Numbers, or rather the lack of them, are the latest gripe of Argentina’s disgruntled farm sector.

Statistics published by the government for years have been disappearing since the Agriculture Secretariat ceded control of the country’s multibillion-dollar grains and beef trade to another state agency, the ONCCA, earlier this year.

Little by little, the government has stopped updating routine tables detailing weekly grains export commitments and purchases by soy crushers. Weekly corn and wheat sales, with details of buyer countries, have not been published since June.

Some new information has been posted in its place, but it smells like a conspiracy to grains exporters, meatpackers and farmers, whose relationship with the center-left government of President Cristina Fernandez seems irreparably damaged following this year’s messy conflict over soy taxes.

“The ONCCA is trying to hide its errors by withholding information … Distorting, restricting or delaying publication is a grave shortcoming that conspires against the country’s development,” meatpackers’ chamber CICCRA said in an unusually strong-worded statement this week.

Such criticism has been swiftly rebutted by ONCCA chief Ricardo Etchegaray, a former head of customs described as a long-time ally of the president and her powerful husband, ex-President Nestor Kirchner.

“Since we started work in this office, we’ve been dedicated to bringing greater transparency to the agriculture trade,” the agency said in a statement earlier this month.

The ONCCA does publish some grains export information, and has added new details related to safeguarding domestic supplies, but critics say new systems mean the data cannot be compared to past statistics and key details have been lost.

It is not the only government agency to alter or cut back on the information it publishes.A spokeswoman for the ONCCA said technical problems this week had hampered plans to post some of the missing numbers on the agency’s website.

The longer it takes, the more the industry will complain that numbers are being used as a political weapon.

September 25th, 2008

Argentine farmers return to sabre-rattling

Posted by: Helen Popper

rtx803r_comp.jpg

It didn’t take long for Argentine farmers to lose their contented glow after defeating the government over a tax hike on soy exports earlier this year.

The calm that descended on the Pampas plains in the aftermath of the four-month farming conflict was predictably short-lived, and the disgruntled farmers are rattling their sabers again. While they haven’t said what they plan to do, the farm leaders have promised to announce their next move in the coming days.

Talks with the agriculture secretary have not eased their concerns over the state of the ranching industry, the dairy sector and the dreaded export taxes. Many farmers are worse off than with the higher rate, because they lost the rebates and subsidies that the government agreed to during the conflict.

This, coupled with the worst drought for decades and weaker grains prices due to the global financial turmoil mean the bad mood may be near breaking point in the countryside. Will they go on strike again? It’s hard to imagine. President Cristina Fernandez has successfully driven the farmers off the front pages and public sympathy does not look ready to rally behind them.

March 13th, 2008

Argentine farmers say government has gone too far

Posted by: Helen Popper

Every time it looks like relations between Argentine farmers and the governmepampas_plains.jpgnt have hit rock bottom, they get worse.
Exasperated farmers have blocked ports, parked tractors across highways and refused to send their cattle to market in protest at a string of government measures.
They even held a mass prayer rally, hoping the nation’s patron saint might help them resolve the three-year-old row.
This time they have called a two-day strike in protest at an export tax hike that targets their most lucrative crops, soybeans and sunflowers.
Officials say everyone should benefit from the grains bonanza, not just the countryside, which has historically fought with the government in Buenos Aires over the spoils of the country’s farming riches.
They say there will still be an ample profit margin even with the new tax increases.
But farmers say the government has gone too far, and will end up shooting itself in the foot by discouraging the production of the very goods that are swelling state coffers.
Argentina has recovered some of its former fame as the bread basket of the world in recent years, but the rapid rise in export duties that has accompanied soaring global prices means few farmers are celebrating in the famous Pampas plains.

“The worst thing about all this despondency, is that we’re losing a culture.” one farmer told daily La Nacion. “I honestly don’t know if there’s any future in farming for my children.”